# Overheat, Cycle Trading, And Cash Mode Strategy

## Role

This strategy lets the user make money in waves instead of feeling forced to hold every position every day.

It supports:

- Detecting overheating before late FOMO entries.
- Taking profits in cycles, such as +20% and reset, then another +20% attempt.
- Tracking candidates for re-entry after cooling off.
- Moving to 100% cash when the market is not worth the mental or capital risk.
- Separating long-term core holdings from tactical trading positions.

## Position Buckets

Classify every position as one of:

- `CORE`: long-term quality holding. Sell only when thesis, valuation, or opportunity cost changes materially.
- `SWING`: medium-term trade. Use staged entries, profit targets, and trailing invalidation.
- `TACTICAL`: event, momentum, earnings, or theme trade. Faster profit-taking and tighter invalidation.
- `LEVERAGE`: SOXL/TQQQ/UPRO style. Requires regime approval, size limit, and daily loss budget.
- `CASH`: valid active position when market quality is poor or mental load is too high.

## Overheat Detection

Flag `OVERHEATED` when several of these appear together:

- Price rises too far too fast without a new fundamental catalyst.
- Volume spike looks like retail/theme chase rather than institutional accumulation.
- RSI, distance from moving averages, or intraday extension becomes extreme.
- Social/news excitement becomes the main reason to buy.
- Related theme stocks move together regardless of quality.
- The expected upside remaining is smaller than downside to invalidation.
- User feels urgency because the move is already happening.

Overheated does not always mean short or sell everything. It means no new chase without a reset.

## Cycle Profit Strategy

For SWING and TACTICAL positions:

- Set a planned profit band before entry: usually +10%, +15%, +20%, or +30%.
- Define `target_1`, `target_2`, trim size, invalidation, trailing rule, and time stop before entry.
- At +20%, evaluate whether to realize partial or full profit.
- If the move is event/theme-driven and extended, prefer taking profit and tracking reset.
- After exit, place the ticker on the re-entry tracker rather than emotionally re-buying.
- Re-entry requires cooling off, support confirmation, catalyst persistence, or fresh breakout.

Example:

1. Buy early when setup is not crowded.
2. Take +20% if the move becomes hot or the risk/reward compresses.
3. Move to cash or next best setup.
4. Track the same ticker for pullback/retest.
5. Re-enter only if the next +15-20% opportunity is credible.

## 100% Cash Mode

100% cash is not failure. It is an active position.

Use `CASH MODE` when:

- Market regime is deceptive, risk-off, or headline-driven.
- The user is mentally overloaded.
- There are no A-grade risk-adjusted opportunities.
- Existing positions are highly correlated and exposed to gap risk.
- Major binary events are imminent and edge is unclear.
- Profit has been made and the next setup is not ready.
- The broad chart resembles a failed bounce or trend break more than a fast oversold rebound.

Cash mode output should say:

- Why cash is better than forced exposure.
- What conditions end cash mode.
- Which tickers stay on the tracker.
- What trigger allows re-entry.

## Long-Term vs Trading

Long-term investing can coexist with active trading only if buckets are separate.

- CORE positions should have slower review cycles and wider invalidation.
- SWING/TACTICAL positions should not be emotionally upgraded into CORE after they fall.
- A stock can move from tracker to trade, or from trade to tracker, but not without a written reason.
- A high-quality long-term stock can still be trimmed if near-term opportunity cost is too high.

## Required Agent Output

Every relevant report should include:

- Overheat status: Normal, Warm, Hot, Overheated.
- Broad chart state: REBOUND WATCH, TACTICAL REBOUND ACTIVE, TREND REPAIR, FAILED BOUNCE, TREND BREAK, or CASH ADVANTAGE.
- Cash mode status: Fully invested, selective, high cash, or 100% cash allowed.
- Profit cycle plan: entry trigger, target 1, target 2, trim size, full exit level, trailing stop, and time stop.
- Re-entry tracker: ticker, reset level, catalyst, invalidation.
- Bucket classification: CORE, SWING, TACTICAL, LEVERAGE, CASH.